In mature economies, the mobile phone started out as a luxury item, a convenient way to talk to friends and family from anywhere. But in emerging markets, first-time users are turning to mobile phones for more than convenient chatter. They're using their phones as the only way to access the Internet, to use banks for the first time and to start small businesses.
Opera Software, Vodafone Group, Google and Nokia are among the companies that have recently offered evidence of the use of the mobile Web and other non-voice applications in emerging markets.
In general, the use of mobile phones in developing economies is booming. The number of mobile subscribers in developing countries grew five-fold from 2000 to 2005, reaching 1.4 billion and accounting for 70 percent of the total global market, according to a recent report from Vodafone, The Consultative Group to Assist the Poor and World Resource Institute.
Those subscribers are doing more than talking. "Mobile is becoming a significant way to access the Web and a growing number of people will get their first experience of the Net on a mobile device," said Olli-Pekka Kallasvuo, president and chief executive at Nokia, during a recent investors conference.
He says it makes sense that people in some emerging markets would use their phones instead of PCs to access the Internet. In India, for example, 136 million people have mobile phones and fewer than 20 million have PCs, Kallasvuo said.
Nokia has evidence of the predominance of mobile Web users outside of developed regions. Its mobile-enabled Web site gets around 90 million hits every month and 60 million of those come from users in China, Kallasvuo said.
Google has also recognized the trend. "Mobile devices in India and China are the primary devices for users to experience the Internet," said Omid Kordestani, senior vice president of global sales and business development for Google, speaking during a recent conference. With 1 billion Internet users and 2 billion mobile users around the world, it makes sense for Google to tweak its offerings for mobile users, he said.
Browser developer Opera says that downloads of its Opera Mini client also demonstrate the widespread use of mobile phones to access the Web in developing economies. While Opera has primarily marketed Opera Mini in developed markets, India, South Africa, China and Russia are among the top 10 regions for Opera Mini downloads, said Tor Odland, an Opera spokesman.
Worldwide, 8 million people have installed Opera Mini, a small browser that users download onto their phones. The software communicates with Opera servers, which strip down Web sites so that they'll load quickly and fit nicely onto the small screens of mobile phones.
Opera Mini is popular in Bangladesh and has lead to increased usage of Grameenphone's EDGE (Enhanced Data Rates for GSM Evolution) network, said Shakil Ahmed, an engineer at Grameenphone. More than 1 million people subscribe to Grameenphone's EDGE offering with 250,000 of them regular users of the mobile Internet, he said. Grameenphone customers like Opera Mini because it lets them access the Web without owning a PC, he said.
Because Opera hosts the servers that the phone software connects with to access the Internet, it can track where traffic is coming from. Recently, traffic in Africa has been growing, Odland said.
Those African customers could be using Internet connections on their phones to do banking. Vodafone's recent report concluded that while using banks makes poor people less vulnerable in times of crisis, low-income people in Africa often don't bank because branches may be far from their homes and because transactions at cash machines and branches often incur fees.
South Africa is an example of a place that could be ideal for mobile banking. Among people in South Africa who don't use banks, 19 percent have a cell phone and an additional 11 percent have access to a friend or family member's cell phone, the study found. The research also found that 94 percent of low-income people in South Africa who already do mobile banking say it's valuable because it's more affordable than traditional banking.
Opera reports that despite not marketing Opera Mini in South Africa, 200,000 people in the country have downloaded the client. In 2005, just under 10 percent of the population of South Africa had Internet access, according to Research4Business, a research firm.
Anecdotally, Opera is also seeing increased usage of Opera Mini in Nigeria. The company has been receiving e-mails from Nigerian users with questions on using the browser and other comments. One enterprising Nigerian, who e-mailed Opera with his story, found that people were asking him for help downloading and starting to use Opera Mini, said Rolf Assev, chief commercial officer for Opera. The Nigerian entrepreneur put an advertisement in the newspaper and now charges a fee for instruction on how to use the Internet via Opera Mini on cell phones. "He said, 'this is beautiful. People don't have computers but a lot of people have phones,'" Assev said.